BP set to follow Shell pattern by posting sharp fall in annual profits

Oil giant BP is set to report a sharp drop in annual profits this week due to weaker margins on its refining business, as well as disposals and reduced income from its Russian operations.

It is following the pattern set by global rivals Shell and Exxon, both of which reported sharply lower profits in recent days.

Barclays Investment Bank expects the British firm to report profits, adjusted for oil price movements and the cost of exploration, of $21.66billion (£13.5billion) for 2013, down from $25.5billion in 2012.

Down: BP is expected to report a sharp fall in annual profits

The company is still embroiled in legal action in the US over the 2010 Deepwater Horizon oil rig disaster, when an explosion in the Gulf of Mexico killed 11 men and led to the biggest offshore oil spill in America’s history.